The April-June quarter was a washout for the outdoor medium, with almost no billings
After suffering a severe blow in the first half of the year, out-of-home (OOH) advertising has seen some recovery in July and August. The industry reported a pickup of 25-30% in recent months after it recorded almost nil billings in the second quarter (April-June) of CY 2020.
“There are a lot of enquiries coming. Also, older campaigns, which had been postponed due to the lockdown, are now being resumed,” said Noomi Mehta, chairman and MD, Selvel One.
According to Mehta, his company is poised to see a 30-40% revival in business in September compared to the same period last year.
Outdoor advertising witnessed 55% de-growth in the first half (H1) of the year, plummeting drastically to Rs 761 crore, compared to Rs 1,706 crore in H1 2019, according to a report released by Pitch-Madison in August. The fall was particularly severe in Q2, which coincided with the nationwide lockdown, at just Rs 8 crore in billings, against Rs 844 crore in Q2 2019, stated the report.
The recovery, witnessed recently, is mainly on the back of interest from traditional heavy advertisers on the medium.
“Sectors such as auto, telecom, OTT, media and entertainment, and financial services have returned to advertising on OOH but their budgets have been slashed,” observed Nabendu Bhattacharyya, CEO and MD, Milestone Brandcom.
Outdoor media owners are looking at discounting as a revival strategy to bring advertisers back into its fold, with discounts as high as 50-60% being offered.
According to experts, while earlier it would cost an advertiser Rs 9-10 lakh per month to advertise on a 40×20 feet unipole flex hoarding in Western Express Highway in Mumbai, now the rates have come down to Rs 5 lakh a month.
Advertiser interest, however, is limited to certain formats. Ajay Mehta, managing director, Kinetic Advertising India, said while routes (billboards, hoardings) had seen a recovery, spending on certain destinations like airports, malls and metros remained impacted.
Brands are also keen to advertise in smaller towns, where the pandemic has caused less havoc compared to the metro cities.
OTT platform ALTBalaji, for instance, hitherto a regular advertiser on outdoor media, is staying away from tapping it in metros but is experimenting with it in Tier-II and beyond towns.
“There is still a lot of uncertainty right now and we see ourselves going back to the medium, full-fledged, in two months,” said Divya Dixit, SVP, marketing, analytics and direct revenue, ALTBalaji. The company used to dedicate about 15-20% of its overall marketing budget to OOH in the pre-Covid times.
The rates for OOH in smaller towns are much lower than that in metro cities. For instance, it would cost a brand Rs 3 lakh a month to advertise on a 40×20 feet flex hoarding in Bhopal compared to Rs 10 lakh on Western Express Highway in Mumbai in the same format. The result? Outdoor media companies, too, are trying to move their focus to small towns.
“Till the situation improves, we are going to focus on small towns as brands are keen to tap these markets,” said Atul Shrivastava, CEO, Laqshya Media Group. Shrivastava cited the example of JK Tyre, which tapped more Tier-II and beyond cities for its recent campaign. The business in small towns, however, can offer little consolation to the medium, as the contribution of the metro cities to the industry is as high as 60-70%.
The OOH industry has now pinned its hopes on the festive season and IPL 2020. The Pitch-Madison report predicted that OOH would see billings in the range of Rs 950-1,500 crore in the second half of the year.